Did Whole Foods CEO Blog Illegally?

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In the wake of a reported probe by the Securities and Exchange Commission, securities experts have been confounded by the question of whether the online actions of John Mackey, the CEO of Whole Foods Market, were legal. Many have concluded that it would be hard to prove that he was intentionally manipulating a rival’s share price when he posted pointed comments about the rival online.

The SEC has launched an informal investigation into anonymous Internet postings written by Mackey deriding Wild Oats Market, a company that Whole Foods has been attempting to acquire, the Associated Press reported.

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The postings drew wider attention last week when they cropped up in a lawsuit by the Federal Trade Commission that aims to stop Whole Foods from buying Wild Oats for anti-trust reasons. The lawsuit included information about his postings, written under the name “rahodeb” (a scrambled version of “Deborah,” his wife’s name), called Wild Oats stock overpriced and predicted it would fall into bankruptcy.

The SEC has not publicly announced a probe. Representatives from Whole Foods and Wild Oats did not return calls from CFO.com asking for comment.

The company has said that many of Mackey’s online comments, which were written between 1999 and 2006, had been taken out of context. In a page
of the Whole Foods website devoted to the FTC lawsuit, Mackey writes, “I posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms.”

He goes on to explain that his postings did not always convey his actual beliefs and that they never expressed the official views or intentions of Whole Foods.